Berger Paints India’s June quarter (Q1FY27) result was decent, but lagged larger rival Asian Paints on select parameters. Consolidated revenue at ₹3,583 crore grew 12% year-on-year, a multi-quarter high, led by price hikes and volume. Mainstay decorative paints volumes rose 8.4%, slightly below Asian Paints' 9%.

Strong traction in high-margin emulsions and construction chemicals aided value growth of 13.5%. Input cost inflation and delayed price hikes in the industrial paints business meant Berger’s gross margin dipped to 40.9%, while Asia Paints' margin rose, mainly shielded by low-cost inventory.

Growth outlook

While Asian Paints is bracing for full impact of cost inflation from Q2FY27, Berger could be better off. Q2 revenue growth is likely to be better than Q1 buoyed by volume and price growth of 7-8% each, the management said.

Double-digit revenue growth would sustain in FY27 aided by distribution expansion, product launches and festive demand from late Diwali this year. It expects high single-digit volume growth in FY27.

Berger added 2,100 tinting machines in Q1, and aims to add 10,000 tinting machines in FY27, signalling its aggressive market expansion. “We believe the numerical gap between the distribution network of the market leader (Asian Paints) and Berger could materially reduce in the next three years,” said ICICI Securities.

Demand trends were healthy with south and north India continuing to outperform, but east was impacted by Assam floods. Ebitda margin expanded to 16.9% led by operating leverage and disciplined cost control. FY27 operating margin guidance was retained at 15–17%.

Berger expects Q2FY27 operating margin to expand year-on-year, implying a high-teens Ebitda growth and indicating a lower-than-feared input cost inflation impact in Q2, said Systematix Shares and Stocks (India). It raised Berger’s FY27 and FY28 EPS estimates by 9% and 5%, respectively.

Both paint makers acknowledged intense competition as new entrants continue to gain grip. Berger said, Birla Opus’ pricing is now at par with the industry, but rebates to larger dealers have increased.

The overhang of competition could delay a meaningful re-rating for the sector even as demand improves. The Berger stock is 7% away from its 52-week high seen in November and trades at a rich FY28 price-to-earnings multiple of 44 compared to Asian Paint’s 46, showed Bloomberg data.

Berger Paints India’s June quarter (Q1FY27) result was decent, but lagged larger rival Asian Paints on select parameters. Consolidated revenue at ₹3,583 crore grew 12% year-on-year, a multi-quarter high, led by price hikes and volume. Mainstay decorative paints volumes rose 8.4%, slightly below Asian Paints' 9%.

Strong traction in high-margin emulsions and construction chemicals aided value growth of 13.5%. Input cost inflation and delayed price hikes in the industrial paints business meant Berger’s gross margin dipped to 40.9%, while Asia Paints' margin rose, mainly shielded by low-cost inventory.

Growth outlook

While Asian Paints is bracing for full impact of cost inflation from Q2FY27, Berger could be better off. Q2 revenue growth is likely to be better than Q1 buoyed by volume and price growth of 7-8% each, the management said.

Double-digit revenue growth would sustain in FY27 aided by distribution expansion, product launches and festive demand from late Diwali this year. It expects high single-digit volume growth in FY27.

Berger added 2,100 tinting machines in Q1, and aims to add 10,000 tinting machines in FY27, signalling its aggressive market expansion. “We believe the numerical gap between the distribution network of the market leader (Asian Paints) and Berger could materially reduce in the next three years,” said ICICI Securities.

Demand trends were healthy with south and north India continuing to outperform, but east was impacted by Assam floods. Ebitda margin expanded to 16.9% led by operating leverage and disciplined cost control. FY27 operating margin guidance was retained at 15–17%.

Berger expects Q2FY27 operating margin to expand year-on-year, implying a high-teens Ebitda growth and indicating a lower-than-feared input cost inflation impact in Q2, said Systematix Shares and Stocks (India). It raised Berger’s FY27 and FY28 EPS estimates by 9% and 5%, respectively.

Both paint makers acknowledged intense competition as new entrants continue to gain grip. Berger said, Birla Opus’ pricing is now at par with the industry, but rebates to larger dealers have increased.

The overhang of competition could delay a meaningful re-rating for the sector even as demand improves. The Berger stock is 7% away from its 52-week high seen in November and trades at a rich FY28 price-to-earnings multiple of 44 compared to Asian Paint’s 46, showed Bloomberg data.